Forex Analysis

DEFINITION of 'Forex Analysis'

An examination of the changes in the forex market that are used by a trader to determine whether to buy or sell a currency pair at any one time. Forex analysis could be technical in nature, using charting tools, or fundamental, using economic indicators and/or news-based events.

BREAKING DOWN 'Forex Analysis'

Forex analysis can be either manual or automated. A manual system involves a trader sitting at the computer screen, analyzing signals and interpreting whether to buy or sell. In automated trading analysis, the trader teaches the software what signals to look for and how to interpret them. It is thought that automated analysis takes the element of human psychology out of trading.